Look to fall for wary consumers to open wallets: Pineda to LA Times

July 16, 2015

LOS ANGELES (7/16/15)--Following CUNA Chief Policy Officer Bill Hampel’s appearance in The New York Times, CUNA Senior Economist Perc Pineda was called on by the Los Angeles Times this week to give his take on recent consumer spending trends.

The Commerce Department reported Tuesday that consumer spending slipped by 0.3% in June from the previous month, and Pineda told the Times that part of the setback rests at the feet of retailers.

“People have the disposable income, but they are cautious about where they spend their money,” Pineda said. “Businesses are not innovating and not offering something new. It’s not surprising that on a monthly basis, you have actual negative sales growth.”

Once shops start rolling out autumn merchandise, Pineda said, consumers will have more interest in heading to the mall to spend their money.

Pineda added that retail sales should climb 2% to 3% in the second half of 2015, and that California consumers in particular should have healthy enough credit to spend, as the average delinquency rate on loans currently sits at 0.5% in that state, compared with the national average of 1.6%.

Spending also may be fueled in the coming weeks and months thanks to fresh competition between Wal-Mart and Amazon, both of which have unveiled massive sales this week in an effort to fire up business.

Amazon, for example, will celebrate its 20th anniversary by offering more sales promotions than it typically does on Black Friday. Wal-Mart will counter with more than 2,000 online-only discounted items that, for the next 30 days, will ship for free if the purchase is under $35.

The Times found that consumers have largely put a lid on spending habits despite recent improvements in the overall economy.

“I just need less stuff, and I don’t need to buy as much as I used to,” one college student told the Times. “I’m saving money.”

Does your CU offer or plan to offer cannabis banking services?

Champion of America’s Credit Unions

Credit Union National Association is the only national association that advocates on behalf of all of America’s credit unions. We work tirelessly to protect your best interests in Washington and all 50 states. We fuel your professional growth at every level and champion the credit union story at every turn.